Tariffs costs pushing many Manitoba small businesses to edge: CFIB survey

More than one-third of Manitoba small businesses are at risk of closure over the next year if nothing changes in the United States-Canada trade war, the Canadian Federation of Independent Business is warning.

The national organization launched a still-active survey Aug. 8. Preliminary results show, of the 1,721 Canadian respondents, 62 per cent are seeing tariff-related higher expenses.

Eighty-five Manitoba businesses had participated by the CFIB’s Wednesday release. Twelve per cent said their business couldn’t sustain the increased tariff costs past six months.

Canada and the U.S. have placed a slew of tariffs on each other’s imports. Among them are 25 per cent levies on $59.8 billion worth of U.S. goods entering Canada.

The move came in retaliation to American tariffs.

“It’s exceptionally hard for small businesses who don’t really have the capacity to absorb some of these increased costs,” said Brianna Solberg, CFIB director of legislative affairs for the Prairies and northern Canada.

Another 23 per cent of Manitoba respondents said they couldn’t sustain business past a year with current tariff increases.

Some CFIB members have raised their own prices, Solberg said.

“That makes things really tough … consumer demand is already low,” she added, noting many have delayed expansion plans.

Retailers including Milieu Market and Northlore have shifted from American suppliers as product costs rise. Others, like robotics company Eascan Automation, have laid off staff.

Layoffs in Canada’s manufacturing sector have been “substantive,” said Ryan Greer, senior vice-president of public affairs and national policy for the Canadian Manufacturers & Exporters.

He’s counted 40,000 Canadian manufacturing jobs lost since January. Most stem from auto production hubs in Ontario and Quebec, but Manitoba hasn’t been immune, he said.

Businesses are crippled by U.S. tariffs and by uncertainty leading to less consumer demand. Government programs are available, but they can’t fully offset trade done with the United States, Greer relayed.

“This is a real lose-lose proposition,” he said, noting American manufacturers are also seeing declined production. “We are very hopeful that Canada and the U.S. can reach a good deal.”

Ottawa has drawn more than $1 billion in tariff revenue from import duties. The money should be funnelled to impacted small businesses, Solberg argued.

Per the CFIB’s preliminary findings, almost all Manitoba businesses are affected by the ongoing trade war. Eighteen per cent of the 85 respondents directly export to the United States; 44 per cent import from the country.

Most buy from Canadian suppliers who source from the U.S., Solberg relayed.

The end of a rule allowing low-cost packages to cross into the U.S. duty-free — called the de minimis exemption — looms on Aug. 29. It could be a “huge blow” for Manitoba businesses, Solberg said.

Twenty per cent of the CFIB’s Manitoba respondents said they’d be directly impacted by the de minimis exemption’s pause. Another eight per cent reported they’d be indirectly hurt.

The online survey is conducted with CFIB members. Since the survey was not conducted with a random sample, no margin of error can be ascribed to the results.

gabrielle.piche@winnipegfreepress.com